Landscape of Canadian Business Associations Role in Economy, Internal Structure, and Cooperation between Government and Enterprises Alexandre LAROUCHE-MALTAIS Senior Trade & Investment Expert The Conference Board of Canada Ottawa, 14 September 2016 conferenceboard.ca
Definition “Business associations are membership organizations engaged in promoting the business interests of their members. These associations typically perform activities that would be unduly costly or time-consuming for an individual company to perform by itself, including lobbying, information gathering, research, and setting industry standards .” Over 760 business/trade associations are registered in Canada Source: U.S. Legal.com (2016) 2
Role in the Economy Private Communication Government Sector channel Role Business associations may fill the “communication gap” between the government and the private sector by providing useful insights to policymakers on potential reform impacts and disseminating updated information on future regulatory changes to the private sector. Source: Shkolnikov, Center for International Private Enterprise (2009) 3
Role in the Economy Private Communication Government Sector channel Example 1 “Advocacy: The Power to Shape Policy” Since 1925, the Canadian Chamber of Commerce has connected businesses of all sizes, from all sectors and from all regions of the country to advocate for public policies that will foster a strong, competitive economic environment that benefits businesses, communities and families across Canada. 4
Role in the Economy Private Communication Government Sector channel Example 1 The Canadian Chamber of Commerce’s advocacy initiatives : • Letters to newly appointed ministers • Position papers, e.g. TPP and other international affairs •Publications, e.g. “Top 10 Barriers to Competitiveness” • Blog and newspapers 5
Role in the Economy Private Communication Government Sector channel Example 2 The Canadian Apparel Federation publishes main apparel – related regulations on its website and provides for “regulatory updates” to its members to foster compliance within the industry 6
Supporting competitiveness Training Foreign and Domestic Markets Networking Information Opportunities Trade Promotion Support Role Economic Business associations may offer a wide portfolio of and support services to improve or maintain their Sectoral Forecasting members’ competitiveness on international markets 7
Supporting competitiveness Training Foreign and Domestic Markets Networking Information Opportunities Trade Promotion Support Economic and Sectoral Forecasting Economic and Canadian Manufacturers and Exporters publish Sectoral “Manufacturing Pulse” a quarterly economic update Forecasting 8
Supporting competitiveness Training Foreign and Domestic Markets Networking Information Opportunities Trade Promotion Support Trade Promotion Support The Canadian Apparel Federation launched the “Wear Economic and Canada Program”, which aims to highlight the Sectoral advantages of Canadian sourcing, and support Forecasting Canadian firms in entering new export markets 9
Supporting competitiveness Training Foreign and Domestic Markets Networking Information Opportunities Trade Promotion Support Networking Opportunities Economic The Coffee Association of Canada organizes an and Annual Conference every fall to offer an opportunity for Sectoral Forecasting its members to network and to build partnerships 10
Supporting competitiveness Training Foreign and Domestic Markets Networking Information Opportunities Trade Promotion Support Foreign Market Information Economic The Montreal Trade Board organized a one-day event and on “Indonesia, The Archipelago that Combines Growth Sectoral and Consumption” to explore business opportunities on Forecasting the Indonesian market. 11
Supporting competitiveness Training Foreign and Domestic Markets Networking Information Opportunities Trade Promotion Support Training Economic The Canadian Federation of Independent Business and offers “Online courses for CFIB members” specially in Sectoral Forecasting line with small business owners’ needs. 12
Structure Member B Member C Smaller Importer/ Business Exporter Association Member A Member D Business Big Association’s SME business services Membership Membership may include a variety of different types of private sector stakeholders: SME producers or service providers, big businesses, importers and exporters, and even local or regional business associations (e.g. Chambers of commerce) 13
Structure Member B Member C Smaller Importer/ Business Exporter Association Member A Member D Business Big Association’s SME business services Membership Membership may be either facultative or compulsory , impacting on the membership density and association influence on national policies. High association density may lead to corporatism, but may also foster industry transformation and policy reforms. Source: Doner and Schneider (2000) 14
Four Successful Structural Features Business 1 Voting weighted by size associations meeting these criteria offer Flexibility in adjusting more 2 internal rules membership benefits and address more Transparency in 3 efficiently governance market failures (imperfect information, lack Opportunities for 4 of investment) members deliberation Source: Doner and Schneider (2000) 15
Cooperation between Government and Enterprises Economic and Trade Market-Supporting Market- Policy Formulation Activities Complementing Activities • Private needs identification • Property rights • Implementation Feedback • Uncorrupt Administration • Costly Information • Infrastructure • Low Investment in Training • Lack of Coordination Business Associations Source: Doner and Schneider (2000) 16
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